GULF WEEKLY: OPEC tapers by 0.5m b/d, PMIs rise strongly, hopes for Saudi-Qatar deal

GULF COUNTRIES - Report 04 Dec 2020 by Rory Fyfe and Justin Alexander

A skimmable summary of key developments overlaid with our analysis and links to further information. Headlines include:

* Oil rallied on the OPEC+ decision to taper by 0.5m b/d, vs the original plan for 2m.
* Biden’s Iran challenge was complicated by approval of a law rolling back nuclear compliance.
* There are growing expectations of a limited Qatar-Saudi reconciliation, at least on airspace.
* We are still skeptical, on balance, but the latest signals suggest about a 40% chance of a deal.
* The Saudi PMI bounced strongly to 54.7, and Qatar’s rose to 52.5.
* The Saudi Central Bank extended its loan deferral stimulus by three months.
* Opposition to US arms sales to UAE grew after reports of support for mercenaries in Libya.
* Kuwait has not passed its debt law ahead of elections, but we expect parliament will approve it.
* Fitch does not expect Oman to come close to its 2024 fiscal consolidation targets.
* A senior Omani royal was appointed as ambassador to Saudi Arabia.
* S&P affirmed Bahrain at B+ (stable) and sees its deficit easing to -3.7% of GDP by 2023.

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